pdear120dsI love fall, and always have!


As a native Northeasterner I love “sweater weather” with the cool bite in the air and the colors and sounds of changing and dropping leaves; having spent much time in the South, I love the drop in humidity; I love the West Coast’s wonderful blue skies and the Western states’ early snows (although I do not miss snow, I admit); I love hay rides, apples, pumpkins, cornhusks, ALL of it.


However, as a healthcare professional I will admit to most often not loving the Fall! New or revised HHS “Final Rules” (are they ever really final?), IPPS, OPPS, ICD-9 codes (for another year), MS-DRGs, others and, oh yes, the OIG Work Plan change all are also part of the season.


Oct. 1 is the usual kickoff date for new changes, new initiatives and new or renewed areas of attention – and like it or not, we all must take time to take note of those changes, implement training, plan new processes and review old patterns of behavior. I could focus on an overview of several examples, but instead I want to bring your attention to one that should never escape your notice: the Office of Inspector General Work Plan.


Why this one? Because this document covers ALL healthcare entities, and in whole is always a good barometer of where the action is and therefore where we all are: hospitals, physicians, skilled nursing facilities, rehabilitation providers, DME companies, review entities and even government contractors should spend some time reviewing it.


To begin, let’s go to the source to gain the necessary perspective: the OIG Work Plan for FY 2011. Each area below is extrapolated from the document itself, and to view the whole document, click here: (http://oig.hhs.gov/publications/workplan/2011/FY11_WorkPlan-All.pdf)


OIG “Mission and Activities”


“OIG’s operational mission is to protect program integrity and the well‐being of program beneficiaries by detecting and preventing waste, fraud, and abuse; identifying opportunities to improve program economy, efficiency, and effectiveness; and holding accountable those who do not meet program requirements or who violate Federal laws.”


OIG “Work Planning Process”


“At the beginning of each FY, we issue our annual Work Plan, which describes the specific audits and evaluations that we have underway or plan to initiate in the year ahead considering our discretionary and statutorily mandated resources. The Work Plan also provides general focus areas for our investigative, enforcement, and compliance activities.”


OIG Organization ………”the OIG components that carry out our audit……”


“The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting audits with its own audit resources or by overseeing audit work done by others. Audits examine the performance of HHS programs and/or its grantees and contractors in carrying out their respective responsibilities (highlight added) and are intended to provide independent assessments of HHS’s programs and operations. These assessments help reduce waste, abuse, and mismanagement and promote economy and efficiency throughout HHS.”


I have identified above a few important areas contained in the work plan’s “introductory message” so we are clear about its intent and focus, and so we don’t lose sight of the broad playing field this covers. Audits, investigations, evaluations and legal services are all key organizational components included under the work plan, and have grown in scope, impact and influence during the many years since its inception.


To see where or if the new Work Plan might impact or concern your organization, practice or specialty, start by reviewing the “Table of Contents:”


“Outline of Major Parts and Appendixes


Part I: Medicare Part A and Part B

Part II: Medicare Part C and Part D

Part III: Medicaid Reviews

Part IV: Legal and Investigative Activities

Part V: Public Health Reviews

Part VI: Human Services Reviews

Part VII: Department wide Issues

Appendix A: Recovery Act Reviews

Appendix B: Acronyms and Abbreviations”


Hmmm, are you in there? Of course you are. Given the scope this year, I want to call attention to a number of areas, however, please don’t imagine that they are the only ones of importance. There are many others, and someone within your organization needs to review the entire document to determine additional areas of potential exposure.



The following issues can be seen as “black and white” areas, and you will see where the RACs also are included. For your consideration, here are nine issues regarding Medicare Part A & B; I have bolded certain statements in each for added emphasis:


Part I: Medicare Part A & B


Hospital Readmissions


We will review Medicare claims to determine trends in the number of hospital readmission cases. Based on prior OIG work, CMS implemented an edit in 2004 to reject subsequent claims on behalf of beneficiaries who were readmitted to the same hospital on the same day. Pursuant to CMS’s Medicare Claims Processing Manual, Pub. No. 100‐04, ch. 3, § 40.2.5, if a same‐day readmission occurs for symptoms related to or for evaluation or management of the prior stay’s medical condition, the hospital is entitled to only one diagnosis‐related group (DRG) payment and should combine the original and subsequent stays into a single claim. Providers are permitted to override the edit in certain situations. We will test the effectiveness of the edit. We will also determine the extent of oversight of readmission cases. Pursuant to the Social Security Act, § 1154(a)(13), quality improvement organizations (QIO) are required to review hospital readmission cases to determine whether the hospital services met professional standards of care. A readmission is defined as a case in which the beneficiary is readmitted to a hospital less than 31 days after being discharged from a hospital.


(OAS; W‐00‐10‐35439; W‐00‐11‐35439; various reviews; expected issue date: FY 2011; work in progress)


Hospital Admissions With Conditions Coded Present‐on‐Admission


We will review Medicare claims to determine which types of facilities are most frequently transferring patients with certain diagnoses that were coded as being present when patients were admitted, referred to as present on admission (POA). Pursuant to the Social Security Act, § 1886(d)(4)(D), and CMS’s Change Request 5679 (Pub. 100‐20, One‐Time Notification, Transmittal 289), acute care hospitals are required to report on their Medicare claims which diagnoses were present when patients were admitted. For certain diagnoses specified by CMS, hospitals receive a lower payment if the specified diagnoses were acquired in the hospital. We will also determine whether specific providers transferred a high number of patients to hospitals with POA diagnoses.


(OAS; W‐00‐10‐35500; W‐00‐11‐35500; various reviews; expected issue date: FY 2011; work in progress)


Observation Services During Outpatient Visits


We will review Medicare payments for observation services provided during outpatient visits in hospitals. The Social Security Act, §§ 1832(a) and 1833(t), provides for Part B coverage of hospital outpatient services and reimbursement for such services under the Hospital Outpatient Prospective Payment System (OPPS). CMS’s Medicare Claims Processing Manual, Pub. No. 100‐04, ch. 4, § 290, provides the billing requirements. We will assess whether and to what extent hospitals’ use of observation services affects the care Medicare beneficiaries receive and their ability to pay out‐of‐pocket expenses for health care services.


(OEI; 00‐00‐00000; expected issue date: FY 2012; new start)


Place‐of‐Service Errors


We will review physician coding of place of service on Medicare Part B claims for services performed in ambulatory surgical centers (ASC) and hospital outpatient departments. Federal regulations at 42 CFR § 414.32 provide for different levels of payments to physicians depending on where the services are performed. Medicare pays a physician a higher amount when a service is performed in a non-facility setting, such as a physician’s office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ASC. We will determine whether physicians properly coded the places of service on claims for services provided in ASCs and hospital outpatient departments.


(OAS; W‐00‐09‐35113; W‐00‐10‐35113; various reviews; expected issue date: FY 2011; work in progress)



Coding of Evaluation and Management Services


We will review evaluation and management (E&M) claims to identify trends in the coding of E&M services. Medicare paid $25 billion for E&M services in 2009, representing 19 percent of all Medicare Part B payments. Pursuant to CMS’s Medicare Claims Processing Manual, Pub. No. 100‐04, ch. 12, § 30.6.1, providers are responsible for ensuring that the codes they submit accurately reflect the services they provide. E&M codes represent the type, setting, and complexity of services provided and the patient status, such as new or established. We will review E&M claims to determine whether coding patterns vary by provider characteristics.


(OEI; 04‐10‐00180; expected issue date: FY 2011; work in progress)


Payments for Evaluation and Management Services


We will review the extent of potentially inappropriate payments for E&M services and the consistency of E&M medical review determinations. CMS’s Medicare Claims Processing Manual, Pub. No. 100‐04, ch. 12, § 30.6.1 instructs providers to “select the code for the service based upon the content of the service” and says that “documentation should support the level of service reported.” Medicare contractors have noted an increased frequency of medical records with identical documentation across services. We will also review multiple E&M services for the same providers and beneficiaries to identify electronic health records (EHR) documentation practices associated with potentially improper payments.


(OEI; 04‐10‐00181; 04‐10‐00182; expected issue date: FY 2012; work in progress)


Questionable Billing for Medicare Outpatient Therapy Services


We will review paid claims data for Medicare outpatient therapy services from 2009 and identify questionable billing patterns. We will identify counties with high utilization and compare utilization in these counties to national averages. We will also determine the extent to which billing characteristics in high‐utilization counties, including questionable characteristics that may indicate fraud, differed from billing characteristics nationwide.


(OEI; 04‐09‐00540; expected issue date: FY 2011; work in progress)


Error‐Prone Providers: Medicare Part A and Part B


We will review Medicare Part A and Part B claims submitted by error‐prone providers. CMS’s Medicare Claims Processing Manual, Pub. No. 100‐04 requires providers to submit accurate claims for services provided to Medicare beneficiaries. Previous OIG work illustrated a methodology for identifying error‐prone providers using CMS’s Comprehensive Error Rate Testing (CERT) Program data. Using this methodology, we identified providers that consistently submitted claims found to be in error in a 4‐year period. We will select the top error‐prone providers based on expected dollar error amounts and match selected providers against the National Claims History file to determine the total dollar amount of claims paid. We will then conduct a medical review on a sample of claims to determine their validity, project our results to each provider’s population of claims, and request refunds on projected overpayments.


(OAS; W‐00‐11‐40044; various reviews; expected issue date: FY 2011; new start)


Identification and Recoupment of Improper Payments by Recovery Audit Contractors


We will review the performance of the Recovery Audit Contractor (RAC) program. The RACs conduct post-payment reviews to identify overpayments and underpayments and attempt to recoup any overpayments they find. Following a 3‐year demonstration project, the Tax Relief and Health Care Act of 2006 (TRHCA), § 302, mandated nationwide implementation of a permanent RAC program for Medicare Parts A and B. Section 6411 of the Affordable Care Act expanded the RAC program, giving it additional responsibilities to address improper payments in Medicaid, Medicare Part D (Prescription Drug Benefit), and Medicare Part C (Medicare Advantage). Previous OIG work found problems with RACs’ process for identifying and reporting potential fraud during the RAC demonstration project. We will also review CMS’s oversight of the RAC program. (OEI; 00‐00‐00000; expected issue date: FY 2012; new start)”


Part II focuses on Medicare C & D, and I have identified only two areas providers need to be particularly aware of (but again, this does not mean other areas are not of importance):



Part II: Medicare Part C & D


Duplicate Fee‐for‐Service Billings for Beneficiaries Enrolled in Medicare Advantage


We will determine whether Medicare Administrative Contractors (MAC) and/or fiscal intermediaries (FI) improperly reimbursed providers for inpatient hospital services provided to beneficiaries enrolled in MA plans. For beneficiaries enrolled in MA plans, Medicare makes payments directly to the plans. The managed care plans are to arrange and pay for all necessary medical services. Pursuant to Federal regulations at 42 CFR § 412.20(e)(3) inpatient hospital services should not be paid on a fee‐for‐service (FFS) basis on behalf of Medicare beneficiaries enrolled in an MA plan. We will determine whether the MACs and FIs complied with Federal regulations in making FFS payments to hospitals for inpatient services furnished to MA plan beneficiaries.


(OAS; W‐00‐11‐35552; various reviews; expected issue date: FY 2011; new start)


Medicare Advantage Risk Adjustment Data Validation


We will determine whether CMS adjusted payments to MA plans in accordance with Federal regulations at 42 CFR §§ 422.308(c) and 422.310(e) based on the results of their data validation reviews. Risk adjustment data validation is an annual process of verifying diagnosis codes; the process affects payments to MA plans. CMS contracts with Quality Improvement Organizations (QIO) (or QIO‐equivalent contractors) to verify whether diagnosis codes are supported by medical record documentation. We will review the CMS contractors’ calendar year (CY) 2007 data validation results and determine whether CMS appropriately adjusted payments.


(OAS; W‐00‐11‐35554; various reviews; expected issue date: FY 2012; new start)”


To conclude, fall can have warm “Indian Summer” days and evenings, but eventually winter does arrive. Making certain you are ready for winter is always prudent, so stock up on information, verify your processes and validate the integrity of what is documented to support whatever you have been paid for.


In the words of Mark Twain, “The difference between the right word and the almost right word is the difference between lightning and a lightning bug.”


About the Author


Patricia Dear, RN, has more than 30 years of experience in the healthcare industry, working within corporate healthcare entities, for-profit and non-profit hospital systems, legal defense and plaintiff counsel. She is a recognized national speaker on reimbursement and compliance. She is the president and CEO of eduTrax®.


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